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New Work and Operating Principles Published: Tuesday, July 25, 2000 By: Dr. Manuel Angel Morales

In a knowledge economy, commerce in knowledge will fuel an unprecedented rate of start-ups and shifts in business strategies. Knowledge will be the core business of the knowledge economy with information, its raw material, to harness into myriad products and services. How well a business scans its enviroment, exploits its targets of opportunities, and makes adjustments to its business will determine its survival. Business strategy will be an ongoing and dynamic process of deliberation and execution. Organizations will define their mission as much by the market they address as by the technologies in which they have technical competencies. It may be common to see statements such as "to produce units at the lowest possible cost and more smaller quantities of high quality (as defined by the customer) of customized products and services. The core values as the set of beliefs about work, people and business will refer to customer focus, learning and improvement, teamwork, flexibility, ethics and information.

A number of work and operating principles will dominate, for example, the future of the manufacturing organization.

Manufacturing will be the same as service. It will be the provider of quality customer service throughout the product`s life, as well as the producer of quality customized goods. Consumer participation in production and service delivery will be the rule. Computer-based technologies will allow customers to participate in designing goods and services tailored to their own needs and preferences. Where as today`s operating formula calls for standarization of products and services, successful future business will be engage on elaborating individually customized products to mass markets. The customized products may be built out of standard components, but they will be assembled as unique combinations of standard parts.

Organization and business process design, that is the structuring of work, will be based on the criteria of speed and flexibility. Key capabilities in rapid and flexible re-configurability, rapid prototyping and rapid information handling and decision making will be critical to competitiveness and human performance. Direct communication between the customer and the manufacturer (provider of the services) will reduce the duration of order entry and processing cycle. The purpose is to compress response time in all functions of the organization.

Key will be the ability to analyze and optimize the supply chain configuration of the factories, suppliers, distributors, and retailers to meet fluctuations in demand variability. The logic will be one of on-demand production. To facilitate such a process, suppliers and manufacturers will develop electronic linkages that permit co-processing information. Due to the sophistication of these electronic relationships, traditional functions will dramatically reduce cost and time in the transaction cycle.

The organizations of the future will create value added alliances yet maintain a balance between competition and cooperation. The same organization can be supplier, customer and competitor. This is the concept of coopetition. Manufacturers will optimize a business globally to specialize in the production of components, to maximize economies of scale, and to move managers and technologies around the world to share expertise and solutions. They will have local roots everywhere they operate, recruiting the best talent from local universities, and working with government to increase export. This is a conception of the world as a village.

The emphasis will be on the execution of strategy. Competitive advantage will be based on superior performance with core skills and waste-free organizational processes. Core capabilities are fundamental for making the organization capable of executing the strategy. Finally, we will talk about green manufacturing and service delivery, meaning the recycling of everything and using renewable energy sources.

Copyright 2000 QBS, Inc. 

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